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Financial Products

Financial Products

Questions about financial product options? Find discussions around a wide variety of financial service products here. Looking for your first debit card or a seasoned saver looking for tips to build your bank account, this is a great place to share and learn.

SEP IRA Limitations

I am a self-employed business owner. I received an inheritance from my mother's annuity in 2016. Can I include the inheritance income along with the income from my sole proprietorship to invest into a SEP IRA? Or can it only be self-employment wages?

Re: SEP IRA Limitations

The inheritance would not be considered compensation, and therefore could not be used to determine how much you may contribute to your SEP. You could certainly use the funds to make the contribution, based on the contribution amount as determined by your self-employed compensation amount.

Re: SEP IRA Limitations

The most important thing to remember here is that your contribution limit for an IRA of any kind, including SEP IRA accounts, is determined in part by your earned income. Your inheritance income is not earned income and is not taken into consideration when determining how much you can contribute, however you can make contributions with any type of income.